Staff Reporter
Mizuho Securities has raised its rating on Tractor Supply Company from Neutral to Outperform, now setting a price target of $60.00, an increase from the previous target of $54.00.
Analysts at Mizuho point to several key factors boosting their outlook for the retailer. Notably, they highlight encouraging trends in the pet sector, which makes up about 25% of the company’s sales. Additionally, there’s evidence of recovery from the effects of commodity price deflation on animal feed revenue, further solidifying their optimistic stance.
Tractor Supply Company, which saw its stock value dip after its early December analyst day, has now been designated as a top pick by Mizuho in the Consumer Hardlines sector. The firm has set a new price target based on a multiple of 24 times the updated fiscal year 2026 earnings estimate of $2.48 per share, up from $2.45.
Mizuho analysts anticipate low single-digit percentage growth in comparable store sales for fiscal year 2025. They are confident that Tractor Supply’s recently established financial targets—3-5% growth in comparable store sales and 8-11% annual earnings per share growth—are well within reach. This positive outlook is bolstered by the potential for operating margins to exceed 11%, compared to the current guidance of just over 10.5%.
Mizuho’s optimistic outlook for Tractor Supply is supported by three significant potential earnings drivers. First, the company is expected to tap into a profit pool of approximately $130-150 million from its expanding retail media business. Additionally, there’s a $50 million opportunity in exclusive brands. Finally, the acquisition of Allivet is anticipated to enhance earnings through the pet prescription and healthcare business. Collectively, these factors are projected to elevate the company’s earnings power to $3 or more in the medium term.
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